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24-05-2013

TUPE operates so as to transfer the contracts of employment of those employed in the undertaking immediately before the transfer (and any associated liabilities) to the Transferee. That is why TUPE tends to give employment lawyers migraines and why we are so insistent on taking warranties from Transferors to cover any nasty surprises.

The case of Bangura v Southern Cross Healthcare & Four Seasons Healthcare shows how unexpected issues can arise.

E worked in a care home operated and run by A. Her employment was terminated for misconduct. Six weeks later the care home in which she had worked transferred to another care home operator B. At the time of transfer she had an appeal pending against her dismissal, but it had not by then been determined (and it never was determined).

An employment tribunal held that the TUPE regulations did not transfer liability to B since E was not employed by A 'immediately before' the TUPE transfer.

E appealed. The decision appeared inconsistent with the earlier decision of the EAT in G4S Justice Services (UK) Limited v Anstey. In that case an employee whose appeal against dismissal was successful, transferred to the transferee under TUPE.

In this case the EAT said that in the absence of a successful appeal, a summary dismissal takes effect immediately. As the dismissal was unconnected to the transfer, the employee was not employed or deemed to be employed in the undertaking immediately before its transfer and therefore TUPE did not apply.

Small comfort for B which had to go to the Employment Tribunal and the EAT.

Moral of the story: ensure that suitable employment due diligence is carried out prior to any transfer and the indemnities and warranties are taken where possible.

Sarah Rushton

Sarah Rushton is an employment partner at Moon Beever.

This is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information. 

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